How To Attract Investors To Your Business

A point comes in almost every growing business where it would have to seek out external funding in order to scale. As a start-up or small business owner looking for the best opportunity to scale and expand, fundraising and investor pitching remains the best ways to take your company to the next level. You should know that start-up investors are constantly on the search for the next big thing, so making sure that your company is worth investing in is very much as important as attracting high profile investors to your business.

Based on investors demand, these are the top 6 ways proven to attract investors to your business

#1. A Capable Leadership

A business is as good as its leaders and investors are well aware of this fact. Businesses left in the hands of the wrong people struggle to gain traction. Bad management ruins a good idea and investors do not want to risk their investments in the hands of incapable leaders.  Therefore, surround yourself with a strong leadership team that is as qualified and ambitious as you are and share your vision. Highlight their competency when meeting investors. 

#2. Develop a Strong Business Plan

Your business should be very convincing and detailed.  Investors want to be well assured that your business is worth the risk. A good business plan is profitable and scalable, and will show forecasted growth and plans for revenue generation. 

A strong business plan should be compelling, transparent, realistic, informative, well-researched, and should reflect market analysis.  It should not be overwhelming so as to avoid repelling potential investors.

#3. Prepare a detailed marketing plan.

 Investors want to see a marketing plan that demonstrates two things; one that you know your target and two, how to reach them. This is true whether you are just starting your business or require financial support to advance. Choose convenient and effective marketing tools to carry out marketing planning and tasks. Prepare to have an email platform, a CRM, a social media scheduling tool like Google Calendar, website performance software like Google Analytics, and SEO software at the very least. These tools make the work easier while promoting efficiency. The following should be included in a clear, comprehensive marketing plan together with clearly defined milestones:

• A specialized campaign approach
•  Content marketing strategy
• customer persona analysis
• Leads and email generation using social media
• Sponsored social and PPC tactics

#4.  Have Realistic startup costs

Exorbitant startup costs repel investors and screams incompetence and fraud. Having a well-researched realistic startup cost in relation to the size and level of operations of your business is important in convincing potential investors, and helps them determine how much to invest and the impact of certain amounts of investment on the company’s progress.

While relaying your startup cost to any potential investor, be sure to be explicit about your plans with the startup funds. Any investor is interested in knowing what and how you plan to use the startup funds. These plans should be reasonable and smart. Most importantly, they should be profitable long-term.

#5. Understand and be ready to explain your financial statements.

Investors want to know how your business manages its finances, your cash flow, debt obligations and equity.  Proper finance management assures investors that your company is capable of handling unanticipated financial problems and is also ready to seize new business opportunities. A strong cash flow projection is a sign that your company can stay outside the red, can meet payroll and comfortably shoulder other company expenses. On the other hand, debt obligations and company liabilities could be a signal to investors that your company is struggling to maintain operations.

Your company’s equity also helps investors determine the worth of your company’s stock.

#6. Vision and Long term goals

To attract investors, you should be able to sell your dream. Have a strong vision and achievable long term goals. You need investors to buy into the dream and be motivated enough to invest. Portray your business idea as a potential hit, paint a beautiful picture of your company’s future and use the fear of missing out to your advantage.

  There are a lot of other factors to consider when searching for investors.  Among them, these aforementioned points are vital in your search. Incorporate them into your next pitch to attract investors to your business and keep refining your art.